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Plain packaging boosts illegal tobacco, Qld to restrict E-cigs

Illegal tobacco use in Australia continues to grow with a new report revealing around one in every seven cigarettes consumed is illegal, exposing the fact that plain tobacco packaging has proved only a burden to retailers, according to the Australian Retailers Association.

And Queensland State Parliament voted last week to prohibit the sale and supply of electronic cigarettes to children, restrict their advertising display from January 1, while e-cigarettes will be banned in enclosed and outdoor smoke-free places, according to The Australian newspaper.

The latest in a series of reports by KPMG LLP in the UK, Illicit Tobacco in Australia, shows that illegal tobacco use in the last 12 months has increased from 13.5% to 14.3% of total consumption.

ARA executive director Russell Zimmerman said the change to plain packaging has been a waste of retailers’ time and resources.

“According to the report, had that tobacco been sold legally, the Australian Government would have received an additional $1.2 billion in tobacco excise,” he said.

“Instead of paying tax to the Australian Government, criminals are profiting from this illegal tobacco trade at the expense of local law-abiding retailers who could keep tobacco out of the hands of minors.

“The ARA has long argued the change to plain packaging was an unnecessary burden for small to medium retailers, and it is now further evident that this initiative has had absolutely no effect.”
The ARA is concerned that illegal tobacco products are now swamping the market.

“The ARA will be making the point to the government that action needs to be taken to address the illegal tobacco trade. The government must consider how ever increasing regulation – whether on cigarette packaging or tax – creates additional incentives for tobacco smugglers,” Mr Zimmerman said.

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